UNVEILING A MYSTERIOUS NEW DESTINATION: IT'S NOT JUST SAND AND PALM TREES...

A mix of green valleys and sand dunes, chadors and iPads, edgy mountain ranges and pristine beaches, camels and Carreras: the oil
kingdom harbouring the cradle of Islam has embarked on a surprising journey that will transform the country into a top-notch high-class tourist destination.

May 5th, 2008: on the final day of the Arabian Hotel Investment Conference, HRH Prince Sultan bin
Salman bin Abdulaziz Al Saud, Chairman of the Board and Secretary General of the Saudi Commission for Tourism and Antiquities (SCTA), announced that the kingdom had “welcomed our first
cruise passengers to Jeddah last month, [...] but we are not ready to open up totally. Realistically, we are just at the start of the creation of the service side of tourism, as well as
infrastructure, and we want to be in good shape first.”He then went on to outline a strategic plan to develop tourism in the kingdom.

The government of Saudi Arabia, in its hallmark cautious and discrete fashion, has seen the turn of the century planning the development
of a tourism industry as part of its wider project to diversify the base of the country's economy. To perform this feat, a dedicated tourism authority was created: the Saudi Commission for Tourism
and Antiquities or SCTA.

Traditionally restricted to religious and business travel, most of the country’s tourist attractions are still underdeveloped.
Additional hospitality infrastructure is needed to accommodate more tourists and there is a need to open up the visa process and ultimately ease regulations to entertain new comers.

“When the commission was created in 2000,” explains Dr. Abdullah Al-Jehani, SCTA's vice-president for marketing and media, “we
studied the situation and worked out a development strategy involving all domestic stakeholders and cooperating extensively with international consultants. This has resulted in the 20-year
'Tourism Development Plan 2020', which was approved by the Council of Ministers in 2004.”

At this stage, the SCTA's mandate was established by collecting the various sectors concerned under one umbrella. Authority over
accommodation (hotels and furnished apartments) was transferred from the Ministry of Commerce to the SCTA; responsibility for antiquities and museums, which used to fall under the Ministry of
Education, and travel agencies and tour operators, which formerly fell under the Civil Aviation Department, followed suit.

SCTA's plan involves first classifying the kingdom's tourist attractions, then developing them - with private investment as a priority -
and finally promoting them, first of all domestically and in the neighbouring GCC countries. At a later stage, the international tourist market will be selectively targeted.

THE 2020 TOURISM DEVELOPMENT PLAN

The SCTA was created to explore the tourist potential of Saudi Arabia, identify concrete measures to develop it, initiate individual
projects and draft a general strategy. This has taken the form of a twenty-year plan which aims to increase the flow of tourists from 20.8 million in the base year 2000 to 45.3 million in 2020. This
projected flow is estimated to consist of 34.4 million domestic tourists and 10.9 million foreigners, mostly from the GCC countries and other Arab states. In other words, domestic tourism will be the
primary target group for the country's budding leisure and holiday industry – beside the already existing religious tourism of the hajj and the 'umrah. Attracting foreign tourists for leisure
purposes – as opposed to stays for reasons of business and religion – only takes up a peripheral part of the strategy.

The mission statement of the commission reads: “As the cradle of Islam, the Kingdom of Saudi Arabia aims to develop sustainable tourism
to the socio-cultural, environmental and economic benefit of all, reflecting its cherished Islamic values, heritage and traditional hospitality. The kingdom [...] will harness its unique endowments
to develop tourism in a sustainable manner, providing a high quality experience, while contributing to economic diversification, employment creation, environmental and heritage preservation, cultural
awareness and community enrichment.”

The document outlining the strategy further states: “The development of the tourism industry in Saudi Arabia is viewed as private sector
driven. In this regard the private sector must play the role of main and effective stakeholder in the sustainable tourism development that can be achieved by direct investment in the tourism sector,
enhancing tourism sub-sectors and related support services, development and marketing of the tourism industry, application of quality standards in the industry and training and educating national
manpower in the field to guarantee quality and development of services.”

Foreign investment is encouraged too, although not so much for financial purposes – KSA is a net exporter not only of tourists but also
of investors – as for the technical expertise of investors accustomed to dealing with tourist projects, a know-how that is still lacking in the kingdom.

Indeed,given its potential,the tourist
industry remains a key element in diversifying the economy. In 2009,the sector contributed almost 7% of the country’s non-oil GDP, with 10.8 million
arrivals and revenues of over SR 30 billion. Domestic tourism increased by 11 percent, amounting to 32 million people spending over SR 33 billion. In 2009 too, the SCTAannounced a plan to create 900,000 new jobs in the industry by 2020, almost doubling the 1.1 million currently employed in the sector.

The hajj destination: welcoming over 11 million pilgrims a year

As the cradle of Islam, Saudi Arabia has traditionally received millions of pilgrims annually. Beside the 'umrah or small
pilgrimage which is not tied to a specific time of the year, the world's largest annual pilgrimage, the hajj, brings over 2 million pilgrims to the twin holy cities.Thusreligious tourism alone provides 75% of Saudi Arabia's earnings from international tourism and 60% of domestic tourism. During the
pilgrimage, the hajj terminal in Jeddah's King Abdul Aziz International Airport alone receives 95 planes delivering some 15,000 people every day.

Last year the kingdom registered 1.8 million foreign pilgrims, an all-time record. In addition, domestic pilgrimage averages between
600,000 and 800,000 people every year. Religious tourism therefore offers a highway to the government's commitment to diversity the kingdom's economy. As one of the most democratic among industry
sectors in terms of employment, it causes a domino effect in various other sectors such as transport, hospitality, aviation and services. Expenditures are estimated to have totalled almost SR 82
billion in 2010, but SAMA's prediction for 2015 runs to SR 130 billion, a sharp 60% increase. Currently, however, the sector accounts for 3.6 percent of total GDP and 6.9 percent of non-oil GDP
only.

No wonder, then, that the 2020 tourism development plan is mostlyfocused on domestic
and religious tourism, although “efforts are also made to develop cultural, health, business and sports/adventure tourism,” says Abdullah Al Jehani. “At this stage, we want to attract international
non-religious tourists mainly as MICE (Meetings, Incentives, Conferences and Exhibitions) visitors and high-end heritage tourists.” Indeed, business travel
makes up the majority of non-religious visits to Saudi Arabia. On the other hand, the country's rich history and the diverse ancient remains dotting it are extremely attractive to archaeologists,
historians and laymen interested in ancient civilizations.

In addition, Saudi Arabia offers a surprising climatic variety, comprising not only the well-known central desert plateau of Najd and
the Red Sea coast, but also the green, forested mountain lands around Abha in the southwest, where the population's attire, customs and lifestyle is more reminiscent of bordering Yemen.
“Additionally, KSA harbours many little-known attractions, such as the old Ottoman-era train station in Tabuk, formerly a stop on the German-built railway linking Istanbul to Medina, which is
currently being restored,” says Meteb Abdullah Al-Mahmud, executive manager of Al Sarh Saudi Tours and a live-wire enthusiast dying to turn Saudi Arabia into a tourist destination.

Although the kingdom has been virtually closed to the international community for plain tourism purposes, in 2009 it received
around 20,000 tourists – a more than threefold increase on the 6,000 visiting in 2008.“Saudi Arabia has never been a closed country,” Prince Sultan in a
CNN interview. “We have more than eight million expatriates living in Saudi Arabia and welcome millions of pilgrims throughout the year for the hajj and 'umrah [...]. There is a huge number of
business people coming through and conferences are increasingly frequent, so we have more than our share to worry about for now before really opening up for tourism in any bigger way. Eventually,
however, we will open the country in the sense of hosting value tourism, people who are interested in enjoying the country.”

Walk into the Arabian adventure

Over the past few years,significant investments has been made in tourist
infrastructure, including airport expansions and high-speed rail lines, as well as government-financed training programs, mostly in the form of public-private partnerships. Visa procedures have
meanwhile been eased for non-religious and business visitors and the hotel pool has been surveyed and classified using a standardised a star system.The
issuing of visas for the 'umrah has also been simplified, as part of the general ongoing process of bureaucratic streamlining decreed by king Abdullah. Umrah visas can now easily and electronically
be transformed into tourist visas for those who wish to stay on for a few days and visit other parts of the country. Business visitors are also encouraged to extend their stay beyond the duration of
the conference or trade fair they came for and to book a trip to the archaeological site of Madain Saleh or a tour in the desert.

Indeed, the SCTA predicted a growth of 4% of arrivals in 2010, aiming to attract more than 11.4 million foreign tourists, including
pilgrims. It turned out to be a conservative estimate. Revenues from tourism were also expected to increase by 4.8% in 2010 to SR 66 billion ($17.6 billion) as the kingdom tries to attract more
visitors and religious pilgrims. Preliminary reports on 2010 religious tourism revenues increase that figure too - by almost SR 15 billion.

However, there are still a number of restrictions on the issuing of tourist visas, starting with the exclusion of unmarried women
under 35 who are only allowed to visit when accompanied by a male relative. In fact, the 20,000 tourists visas issued last year are only a tiny part of the overall picture. “In any case, the problems
with tourist visas will get solved in the future. Right now, this is not a major issue,” says Dr. Al Jehani. “Let me put it this way: the tourist sector isnow in the stage of product development. When the product is finished and turns out to be attractive, the product owners will exert pressure to provide access to it for more potential
customers. As for now, the focus is on domestic tourism.”

Part of this domestic tourism is health tourism: Riyadh in particular has some very reputable specialist hospitals, such as the King
Faisal Foundation's Hospital, which has treated state leaders from all over the region. Due to the size of the country, however, even Saudi patients may have to travel far for treatment. As several
family members usually accompany their relative under treatment, visiting the hospital daily and surrounding the patient with care and attention, this in turn creates an increased demand for local
accommodation.

In 2009, around 870,000 Saudi tourists holidayed abroad spending around SR 4.7 billion.
Bahrain, Jordan and the UAE topped the list of the destinations with over 600,000 visits.Although the SCTA is conscious that Saudis will continue to travel
abroad for their holidays, the institution is trying to offer them more possibilities at home, in an effort to gradually change their perception of their home country. “What we are aiming at is not
to stop Saudis travelling abroad – on the contrary, we encourage that, as it plays an important role in opening the country and the population up to the outside world – but to entice them into
spending short breaks throughout the year discovering their own country”, says Dr. Al Jehani.

A sure-fire investment

Although on first view, the very concept of tourism might seem to clash with the rather strict morals and traditions of the kingdom,
investing in the sector is nevertheless an attractive proposition.

During the first phase of the 'Tourism Development Plan 2020', which ran from 2005 to 2008, the SCTA developed specific investment opportunities and started its promotional activities, offering incentives and putting in place a general
framework, streamlining bureaucratic procedures and establishing standards.

“The Saudi market, which is very stable economically and financially, has yet to be serviced with a number of projects for which there
is a very big and clear demand and even pressure - especially from the younger part of the population, which is the majority. Saudi society has changed dramatically over the past decade. It has
become more open and modern. This change is slow but irreversible,” explains Dr. Salah Al Bukhyyet, head of the SCTA's Investment Authority.

InFebruary 2010, the government announced its plan to build a $13 billion tourist city
in Al-Oqair, south of Khobar on the eastern coast,which presently offers long stretches of virgin sandy beach but little else. Another project will be developed on Jeddah's Obhur Corniche, this one projected to include a permanent centre for festivities and a heritage village.

“We chose the location of the traditional fishing port of Al Oqair for a mixed-use development, which will offer not only hotels,
restaurants and residential zones but also entertainment parks, shopping malls and beach resorts,” explains Dr. Al Bukhyyet. “We drew up a profile of what attracts the average Saudi family in a
destination and took it from there. We have attracted a consortium of foreign and Saudi investors who are contributing SR 10 billion for construction in a designated 100 km² area in the first phase
of 5 to 10 years.”

Dr. Al Bukhyyet expects a sizeable return on this initial investment: “There is a huge demand for seaside resorts in this country.
Compared to Egypt with Sharm Al-Sheikh or even Dubai, we have very little to offer in this respect – and what we have is usually accommodation pure and simple. So there is an almost guaranteed profit
to be made here, and the earlier investors get into this market, the larger the benefits they will reap.”

Many other sites have been identified on the Red Sea coast, in the provinces of Tabuk, Yanbu, Mecca, Asir, and Jizan. The SCTA estimates
that all the planned Red Sea resorts together will ultimately create 557,000 hotel rooms and 413,000 jobs.

Souk Al-Okaz, another large SCTA project, is currently under development in and around the city of Ta'if, a traditional summer resort in
the mountains near Jeddah and Medina. “Ta'if used to be a popular place to escape the summer heat,” Dr. Al Bukhyyet says, 'but for a long time the general infrastructure was somewhat neglected and no
new structures were added. As a result there are few attractions to entice the modern day tourist. Yet the location obviously has a lot of potential, not only because of its beneficial climate, but
also because of its proximity to both the attractive shopping outlets of Jeddah and the spiritual comfort of the holy places. For domestic tourism, this is an ideal site.”

Accommodation needed: an investment opportunity

With the gradual rise in the number of tourists - domestic, religious, business or otherwise - more hotels are opening their doors
in Saudi Arabia to stop the existing gap.According to sources from the hospitality sector, around 21 new hotels will add 7,000 extra hotel rooms by 2013. In
2010 alone around 2,000 new hotel rooms were added.In fact, a country with a fast growing population of 27 million containing a very high percentage of
youngsters with high purchasing power who are increasingly mobile domestically cannot be overstated as an attractive investment destination.Or at least
that seems to be the prevailing opinion in the international hospitality industry: a number of major international brands are either refurbishing their hotels in Saudi Arabia or expanding their
presence there.International chains are reaching out to the smaller cities such as Ha'il and Tabouk. A new evolution in the sector is starting to tackle
the mid-level income sector with 3 and 4 star hotels, a change from the formerly almost exclusively five-star approach to KSA.

Saudi Arabia additionally has almost as many furnished apartments on offer - 97,000 to be precise – as it does hotel rooms – currently
105,000. Saudi families are still on average larger than European or American families – and more likely to travel with housemaids and drivers - and tend to prefer furnished apartments to hotels. By
2020, these numbers are expected to almost double to 180,000 and 187,000 respectively.

Kingdom Holding, the investment company of well-known billionaire prince Walid bin Talal, plans to open a five-star hotel with 1,000
rooms in Mecca. The kingdom has recently seen the opening of the Park Hyatt Jeddah and the Marina Club and Spa project at the Equestrian Club in Jeddah's Al-Hamra district. The Sheraton Jeddah Hotel
& Resort is going through a major refurbishment. Four Points by Sheraton is scheduled to open a 300-room property in Jeddah in 2012 and another one in Dhahran in 2013. A Loft Riyadh is due to
open in 2013. Ritz-Carlton Hotels in the Middle East has been increasingly focusing on the kingdom too and finally Movenpick Hotels & Resorts recently celebrated the opening of its new 201-room
five-star hotel and resort in Yanbu and in 2011 plans to open its masterpiece in Riyadh.

Experts state 48 hotels with 14,178 rooms have opened their doors in 2010 in the GCC at large, at an estimated cost of $7.3
billion.“Within two years, Riyadh alone will have 20 more hotels and new accommodation is now spreading all over the country, as opposed to the past when
over 70% of the rooms were concentrated in and around the two holy cities,” says Dr. Salah Al Bukhyyet.

In fact, religious tourism to Saudi Arabia is rising as fast as the country can build the infrastructure to accommodate it.
The annual hajj alone brings some 2 million visitors from 160 countries in every year, as many as the kingdom can house. Infrastructural restrictions have forced the government to set a maximumon the number of pilgrims allowed to participate every year, in order to
avoid overcrowding and related dangers.Given these numbers, it is not surprising that just one single real estate developer in Mecca, Jabal Omar
Development Co., has recently embarked on the construction of 27 hotels with a combined 15,000 rooms, the first of which will open in 2011.

Financing tourist development

Although no dedicated tourism fund has been created, there are a number of existing funds that provide financing – as well as
privately owned commercial banks, catering in large part to small and medium enterprises. The Saudi Credit and Savings Bank is one of those most active in
channelling resources to the development of tourism, but investment is also coming through the Millennium Fund, the HR Development Fund, the Heritage Fund and the Kathala programme of the
Saudi Industrial Development Fund. Some private operators, such as theShuaa Saudi Hospitality Fund, are alsodedicated to investment in tourism. In March 2010, the Shuaa Saudi Hospitality Fund, which targets a size of SR 2 billion, announced the acquisition
of a first piece of land in Jeddah for a development project covering a total area of 40,000sqm and estimated to involve an overall investment of SR 500 million. Rotana Hotel Management Corporation,
one of the leading companies of the region in its sector, will manage the 35-storey, 140m tower scheduled to offer 250 hotel rooms and 150 serviced apartments.

"The Shuaa Saudi Hospitality Fund is at the core of our private equity platform, providing a unique opportunity to diversify into
sharia-compliant hospitality investments - a sector not otherwise represented in Islamic investment portfolios," comments Omar Al Jaroudi, Chief Executive Officer of Shuaa Capital Saudi Arabia.
“Saudi Arabia is experiencing a sustained boom in business and leisure travel and the Shuaa Saudi Hospitality Fund is in an excellent position to benefit from that.”

In conclusion, there are a million reasons to discover this country and a billion reasons to invest in its burgeoning tourism
sector.AsDr. Salah Al Bukhyyet succinctly puts it: “Saudi investors have the cash, the logistics and knowledge
of the localities, while foreign investors have the expertise. Combining both elements is, I think, the magic formula for the coming five years.”

Kuwait in Spain

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Our latest investment report on Kuwait was recently published in one of the leading Spanish dailies,
ABC. FindMe in Kuwait explores the economic perspectives of Kuwait and the country´s future plans to compete with its fast developing neighbours. Once the leading country of the Gulf, Kuwait
has remained silent for the past decade. And although many would like to see faster changes, Kuwait is moving, at its pace, to them. Inexorably. Learn about who is who in Kuwait and read what the
leaders say about their own future in our upcoming release: FindMe in Kuwait Mobile app.

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GGC launches FMS and FMB mobile apps

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GGC concludes FindMe in Bahrain

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Global Gulf Consulting has concluded its latest production on Bahrain, FindMe in
Bahrain giving the country a fresh approach after a couple of difficult years of local demonstrations that matched the global recession. Bahrain is a small island in the Arabian Gulf with an
incredible potential for logistics, industries and tourism. FindMe in Bahrain was supported by both the public and private sector of Bahrain. Banagas, Nass Corporation, BBK and DHL were GGC
strategic partners in the development of the series among others.

FindMe in Bahrain is available at the local bookstores Jashamal and online as
well as in the Apple Store. It is a full business leisure and business guide for any investor or visitor interested in traveling to Bahrain or for those that already live there.

New release: FindMe in Saudi 2013 Edition

FindMe in Saudi offers a multi-faceted overview
combining business and leisure, economy and heritage. The book aims to capture the current development of Saudi Arabia in the words of the people who live and work there. It is an authoritative
source of information for investors, businessmen and travellers produced to firmly position KSA as an attractive investment destination.

In contains general information about the country´
economic performance and who is who as a sectorial overview and a leisure guide.